Time Value of Money
Self-Paced Overview
Annuities Due
Annuities dueAnnuity Due:Beginning-of-year cash flows. are beginning-of-year annuities. To work annuities due, simply set up the problem the same way as would be done with an ordinary annuity, then multiply the resulting factor by (1+I). This is done whether the problem is present value or future value.
To illustrate:
Find the future value of a three-year 6% annuity due or $4,000.
so,
FVa = Annuity(FVIFa)(1+I)
FVa = 4,000(3.1836)(1.06)
FVa = $13,498.46

Calculator